Key Details:
- Circa £2.4M total facility
- Receivables, inventory and term loan structure
- Designed to clear HMRC arrears and short-term debt
- Structured to improve liquidity and support ongoing trading
Cash flow challenges can affect even well-established businesses. A UK-based SME with annual turnover of approximately £6M approached Enness Global after increasing pressure on working capital led to greater reliance on short-term funding. Although the business continued to generate consistent revenue through a proven trading model, slower customer payments and mounting financial obligations had begun to place strain on day-to-day operations.
As liquidity tightened, the company accumulated HMRC arrears alongside a number of short-term borrowing facilities. While the underlying business remained commercially viable, the existing funding structure was no longer aligned with its trading cycle, limiting financial flexibility and increasing pressure on creditor relationships.
Conventional refinancing options proved difficult because many lenders were unwilling to consider the combination of existing debt and outstanding HMRC liabilities. A single funding product was unlikely to address every aspect of the business's requirements, making a broader funding strategy more appropriate.
Enness proposed a bespoke asset-based lending (ABL) solution combining receivables finance, inventory funding and a term loan into a single facility of approximately £2.4M, subject to lender assessment and approval.
By releasing capital tied up in both outstanding invoices and inventory, the proposed structure was designed to improve working capital while providing funding to refinance short-term borrowing and address HMRC liabilities. Aligning the facility with the company's trading cycle also offered greater flexibility than the existing funding arrangements.
This case highlights how asset-based lending can provide an alternative funding route for businesses whose balance sheets contain significant working capital assets but where conventional refinancing may be more difficult. Combining multiple funding lines within a single structure can help improve liquidity while creating a platform that supports future growth, subject to lender criteria and the individual circumstances of the business.
Disclaimer
This case study is provided for illustrative purposes only and does not constitute financial, legal, tax or accounting advice. Some examples may be based on client enquiries or indicative lending terms and do not necessarily represent completed transactions. Enness Global acts as a broker and not as a lender. All lending is subject to status, underwriting, valuation and lender approval. Loan terms, pricing and facility structures vary depending on individual circumstances, business performance and market conditions. Independent professional advice should be sought before entering into any financial arrangement.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
